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1. Company Snapshot

1.a. Company Description

Brown & Brown, Inc.markets and sells insurance products and services in the United States, Bermuda, Canada, Ireland, the United Kingdom, and the Cayman Islands.It operates through four segments: Retail, National Programs, Wholesale Brokerage, and Services.


The Retail segment offers property and casualty, employee benefits insurance products, personal insurance products, specialties insurance products, loss control survey and analysis, consultancy, and claims processing services.It serves commercial, public and quasi-public entities, professional, and individual customers.The National Programs segment offers professional liability and related package insurance products for dentistry, legal, eyecare, insurance, financial, physicians, real estate title professionals, as well as supplementary insurance products related to weddings, events, medical facilities, and cyber liabilities.


This segment also offers outsourced product development, marketing, underwriting, actuarial, compliance, and claims and other administrative services to insurance carrier partners; and commercial and public entity-related programs, and flood insurance products.It serves through independent agents.The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance through independent agents and brokers.


The Services segment offers third-party claims administration and medical utilization management services in the workers' compensation and all-lines liability arenas, Medicare Set-aside, Social Security disability, Medicare benefits advocacy, and claims adjusting services.The company was founded in 1939 and is headquartered in Daytona Beach, Florida.

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1.b. Last Insights on BRO

Brown & Brown's recent performance faced challenges due to a softening insurance rate environment. Despite this, the company delivered organic revenue growth and strong free cash flow. Its acquisition of Accession Risk Management Group boosted revenue by a third and enhanced cost efficiencies. However, higher expenses offset some of the gains. The company's Q3 results reflected increased organic revenues, higher commission and fees, and expanded EBITDAC margin. A 10% increase in quarterly cash dividend rate and authorization for up to $1.5 billion share buyback were announced. (Source: Globe Newswire)

1.c. Company Highlights

2. Brown & Brown's 2025 Earnings: A Strong Performance Amidst Challenges

Brown & Brown, Inc. reported revenues of $1.6 billion for the fourth quarter, a 35.7% increase, with organic revenue decreasing 2.8%. The adjusted EBITDAC margin remained flat at 32.9%, and adjusted earnings per share grew 8.1% to $0.93, beating analyst estimates of $0.91. For the full year 2025, revenues reached $5.9 billion, a 23% increase, with organic growth of 2.8%. The adjusted EBITDAC margin was approximately 36%, a 70-basis-point increase, and diluted net income per share grew 10.9% to $4.26. The company generated $1.5 billion in cash from operations.

Publication Date: Feb -01

📋 Highlights

Acquisition and Integration Efforts

Brown & Brown completed 6 acquisitions with estimated annual revenue of $29 million and 43 acquisitions for the full year, including Accession, which added approximately $1.8 billion of annual revenue. The company expects modest improvement in organic revenue growth in 2026, with a focus on integrating Accession and achieving EBITDA synergies of $30-40 million in 2026. As J. Powell Brown noted, the company is "extremely pleased with the performance of the businesses and the integration progress."

Outlook for 2026

The company expects economic growth to be stable, and with decreasing interest rates, it should provide additional economic stimulus. Admitted rates are anticipated to be similar to the fourth quarter, with casualty rates continuing to increase. E&S space pricing will be similar to the fourth quarter, with casualty lines being the most challenging. The effective tax rate is anticipated to be 24% to 25% in 2026.

Valuation and Growth Prospects

With a P/E Ratio of 22.8 and an EV/EBITDA of 11.95, the market appears to be pricing in a certain level of growth. Analysts estimate next year's revenue growth at 6.9%. Brown & Brown's business can outgrow the organic pace of the rest of the industry over the next 3-year period, driven by its strong operating model and focus on balanced profitable growth.

Challenges and Risks

The company faced a significant departure of 275 former teammates to a competitor, resulting in a $23 million revenue impact. However, Brown & Brown is rehiring teammates in affected areas and engaging capabilities across the platform to deliver better customer outcomes. The industry is also experiencing talent wars, which could potentially put pressure on margins. Nevertheless, the company has historically been competitive with compensation plans and has invested in the organization to create long-term wealth for teammates.

3. NewsRoom

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Bank of New York Mellon Corp Acquires 51,959 Shares of Brown & Brown, Inc. $BRO

Feb -01

Source: defenseworld.net

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Best Dividend Aristocrats For February 2026

Jan -31

Source: seekingalpha.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Brown & Brown, Inc. - BRO

Jan -29

Source: prnewswire.com

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Brown & Brown Q4 Earnings Call Highlights

Jan -28

Source: defenseworld.net

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Brown & Brown (NYSE:BRO) Hits New 52-Week Low After Analyst Downgrade

Jan -28

Source: defenseworld.net

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Brown & Brown: Great Insurance Broker's Discount Is Better Now

Jan -27

Source: seekingalpha.com

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Brown & Brown Inc (BRO) Q4 2025 Earnings Call Highlights: Strong Revenue Growth Amidst Challenges

Jan -27

Source: gurufocus.com

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Brown & Brown, Inc. (BRO) Q4 2025 Earnings Call Transcript

Jan -27

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.40%)

6. Segments

Retail

Expected Growth: 8.0%

The growth is slightly lower than the global hypothesis due to potential competition in the retail market, but the segment's diversified product offerings should support steady growth.

Programs

Expected Growth: 9.5%

The expected growth is higher than the global hypothesis because the specialized nature of the programs and the niche markets they serve can command higher premiums and attract less competition, driving growth.

Wholesale Brokerage

Expected Growth: 8.2%

The growth is slightly below the global average due to the intermediary nature of the business, which can be subject to market fluctuations, but its essential role in the insurance supply chain supports a growth rate near the global hypothesis.

Other

Expected Growth: 9.0%

The expected growth is higher than the global hypothesis because the diverse businesses within this segment, such as managed care and third-party administration, are likely to experience higher demand, driving growth above the average.

7. Detailed Products

Retail Brokerage

Provides insurance brokerage services to individuals, families, and small businesses

National Programs

Offers specialized insurance programs for niche industries and professions

Wholesale Brokerage

Provides access to specialty insurance markets for hard-to-place risks

Services

Offers a range of services including claims management, risk management, and compliance consulting

MGA/MGU

Acts as a managing general agent (MGA) or managing general underwriter (MGU) for insurance carriers

8. Brown & Brown, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Brown & Brown, Inc. is medium due to the presence of alternative insurance brokers and agents. However, the company's strong brand reputation and customer relationships mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is low for Brown & Brown, Inc. due to the company's diversified customer base and lack of concentration of customers. This reduces the negotiating power of individual customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Brown & Brown, Inc. due to the presence of a few large insurance carriers. However, the company's scale and diversification of suppliers mitigate this threat to some extent.

Threat Of New Entrants

The threat of new entrants is low for Brown & Brown, Inc. due to the high barriers to entry in the insurance brokerage industry, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is high in the insurance brokerage industry, with many established players competing for market share. Brown & Brown, Inc. must continually innovate and improve its services to maintain its competitive edge.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.49%
Debt Cost 6.29%
Equity Weight 59.51%
Equity Cost 7.93%
WACC 7.27%
Leverage 68.04%

11. Quality Control: Brown & Brown, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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M&T Bank

A-Score: 6.2/10

Value: 6.5

Growth: 5.6

Quality: 6.8

Yield: 6.0

Momentum: 3.5

Volatility: 8.7

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Prudential Financial

A-Score: 6.0/10

Value: 7.0

Growth: 3.4

Quality: 5.3

Yield: 8.0

Momentum: 3.0

Volatility: 9.0

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Truist

A-Score: 5.7/10

Value: 4.7

Growth: 2.8

Quality: 5.7

Yield: 8.0

Momentum: 5.0

Volatility: 8.0

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Marsh McLennan

A-Score: 5.3/10

Value: 3.3

Growth: 6.6

Quality: 6.4

Yield: 3.0

Momentum: 2.5

Volatility: 10.0

1-Year Total Return ->

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Brown & Brown

A-Score: 5.2/10

Value: 3.4

Growth: 7.4

Quality: 8.2

Yield: 1.0

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

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Arthur J Gallagher

A-Score: 4.6/10

Value: 1.9

Growth: 6.7

Quality: 5.8

Yield: 2.0

Momentum: 2.5

Volatility: 9.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

71.3$

Current Price

71.3$

Potential

-0.00%

Expected Cash-Flows